Confidentiality Agreement
Definition
A legal contract designed to prevent the disclosure of sensitive business information.
What is a Confidentiality Agreement?
Also known as a non-disclosure agreement (NDA), this contract prevents employees, vendors, or contractors from sharing proprietary, financial, client, or trade secret information during or after employment.
Why is a Confidentiality Agreement Important for Employers?
- Protects intellectual property and competitive advantages
- Sets clear expectations for handling sensitive data
- Offers legal recourse in the event of a breach
- Reinforces a culture of trust and responsibility
FAQs
What is the goal of a confidentiality agreement?
To legally protect sensitive company information like trade secrets, client lists, pricing models, or internal processes.
When should employees sign a confidentiality agreement?
Ideally during onboarding, especially if the employee will handle proprietary or confidential information.
What happens if an employee breaches a confidentiality agreement?
The employer may pursue legal action including damages, injunctions, or termination depending on the severity and state laws.
How ExtensisHR Can Help
We support your confidentiality practices by:
- Providing customizable, compliant NDA templates
- Advising on when to use confidentiality agreements
- Helping integrate confidentiality policies into onboarding
- Ensuring compliance with applicable state laws